Answer: Bust out is a hybrid credit and fraud problem. Also known as sleeper fraud, it occurs when a consumer applies for and uses credit, often under his or her own identity with the intent of maxing out all available credit and eventually disappearing. These criminals engage in normal transactions and pay consistently like good customers, while planning to ignore the final payment and abandon the account. They may have good credit scores, exhibit satisfactory credit utilization and make regular payments until a short time before the bust out occurs.
A bust out scheme is typically defined by the following behavior:
The account in question is delinquent or charged-off
The balance is close to or over the limit
One or more payments have been returned
The customer cannot be located
The above conditions exist with more than one account and/or financial institution
Bust out is a growing area of fraud for the financial services industry. For organizations across the globe, bust out fraud is not a new problem. However, despite continuous efforts to fight this crime, the losses incurred continue to increase.
To learn more about bust out fraud and how you can identify the potential for a customer to bust out, click here to register for this one-hour webinar: Optimize your fraud defenses: Innovative approaches to address today's fraud trends.
Experian BoilerplateExperianís Decision Analytics business combines data intelligence, analytics, software and consulting to help clients optimize profitability and improve performance. Its enterprise-wide decisioning capabilities enable clients to manage and mitigate credit risk; prevent, detect and reduce fraud; meet regulatory obligations; and gain operational efficiencies. 1 888 414 1120 or email@example.com.
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